Tag Archives: Crowdfunding

Redrawing the Public-Private Boundaries in Entrepreneurial Capital-Raising — The Harvard Law School Forum on Corporate Governance

Small business of-interest and need-to-know.

Excerpt:  In our article, Redrawing the Public-Private Boundaries in Entrepreneurial Capital Raising, we examine what the JOBS Act (enacted earlier this year) tells us about the division between the public and private spheres in securities regulation. On its face the JOBS Act broadly expands the private realm as defined by our national securities laws. It provides two new exemptions from registration (crowdfunding and Regulation A+) and will broadly expand the reach of the most-used existing exemption from registration by removing the ban on general solicitation from exempt offerings made pursuant to Rule 506, provided they are made only to accredited investor. Yet legislative reform has done little to shore up the shaky foundation of existing theory that guides how we have thought about dividing public from private obligations in this area of the law.

Read full article via Redrawing the Public-Private Boundaries in Entrepreneurial Capital-Raising — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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How to Pick the Best Crowdfunding Platform

With the JOBS Act in place, the crowdfunding offers and sites are growing.  This article gives you an overview of the crowdfunding by niches to help you source the right one.

Excerpt: Variations of this phenomenon are flooding the internet, with new platforms being created and launched every day. As crowdfunding platforms become more prevalent, more niches are being defined. Whether you are a tech-savvy entrepreneur or a food connoisseur, there is a perfect crowdfunding website to gather support and fuel your new business.

Below are six online crowdfunding platforms, each targeting different users in specific industries

Read full article via How to Pick the Best Crowdfunding Platform.  From Mashable

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3 Online Tools To Find Funding

Here are 3 tools to help you with the startup’s almost never ending need for capital and funds—-  good information but note the how-to included.

Excerpt……Whether you’re trying to grow a business or start one, securing the money to do it can be overwhelming. From traditional bank loans to crowdfunding, there are now many options to consider. To determine which ones are best for you, here are three online tools to consider:

Read full article…..via 3 Online Tools To Find Funding | Entrepreneur.com.

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6 Crowdfunding Mistakes That Can Kill a Campaign

Small business need-to-know ……crowdfunding interests mean you need to dot your i and cross that t……otherwise, you will fail!

Excerpt……Interest in crowdfunding continues to skyrocket, thanks to the record-breaking success of campaigns like the Pebble: E-Paper Watch, and Double Fine Adventure. The recent passage of the JOBS Act and the popularity of websites such as Kickstarter, RocketHub and IndieGogo have only reinforced its popularity.

But for every successful crowdfunding campaign you hear about, many more have utterly and completely failed to meet funding goals. The reasons? Well those are plentiful

Read full article….via 6 Crowdfunding Mistakes That Can Kill a Campaign.  From Mashable.

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The Burdens of Crowdfunding

Important need-to-know for small business owners and entrepreneurs considering crowdfunding…  the JOBS Act……

Excerpt………Because of the reporting and regulatory hurdles, crowdfunding as it’s specified in the Jumpstart Our Business Startups (JOBS) Act may be too complex and onerous — and not very cost-effective — for any of these early-stage ideas.

Originally, the ability to raise capital from a bunch of individuals through social media without having to register with the Securities and Exchange Commission sounded like a great opportunity for Mom-and-Pop shops or someone starting a business out of his garage. But many entrepreneurs may lack the financial acumen and robust business plans they’ll need to comply with the JOBS Act and possible further regulations from the SEC, say experts. And they also may not have the cash to hire the accountants and lawyers they will need to navigate the law.

Instead, the companies able to jump into crowdfunding, at the outset, will be more mature firms, says Nicole Denny, a CPA in the audit practice at Kaufman, Rossin, an independent accounting firm.

Read full article…….via crowdfunding costs compliance financial reporting JOBS Act liability kickstarter.  From CFO.com

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The Road to Crowdfunding Hell – HBR

If you are considering crowdfunding…….then you need to read this article…  Small business

Excerpt…….Crowdfunding of equity capital for startups is one of a handful of jewels in the crown of the JOBS Act that swept through the House and Senate in a rare and refreshing show of bipartisanship, and was signed into law by President Obama April 5, 2012. But the crowdfunding jewel is fool’s gold, and is inherently incapable of harnessing “people-to-people power” and the “wisdom of crowds” to “democratize access to capital for entrepreneurs” in order to “create wealth and make things happen,” as crowdfunding sites publicly proclaim. As a savvy tech entrepreneur told me the other day, “I love crowdfunding: it is cheap money for me. I know it is not good for the investors.” That is the problem: crowdfunding will at best be good only for the entrepreneurs and middlemen, paid for by unwitting consumers who simply cannot know enough about the highly risky ventures or the highly complex venture investing process to make informed investment decisions.

Read full article…….via The Road to Crowdfunding Hell – Daniel Isenberg – Harvard Business Review.

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Crowd-Funding Industry Braces for Regulation

More today on the new law and what it means…… news-to-watch ..the SEC regulations forthcoming.

Excerpt…….With President Barack Obama signing the JOBS act in the Rose Garden on Thursday, the clock will start ticking for the U.S. Securities and Exchange Commission to come up with rules to regulate the nascent crowd-funding industry.

Under the act, small businesses can raise up to $1 million in equity funding over the Internet through portals and websites that will have to register with the SEC, which has about 270 days from the act’s signing to come up with rules for the industry.

Read full article…….via Crowd-Funding Industry Braces for Regulation – WSJ.com.

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Obama Signs Small Business Legislation

Well, guys, it is now law………  small business of-interest.

Excerpt…….In addition to the emerging growth company and crowd-funding provisions, the legislation removes SEC regulations preventing small businesses from using advertisements to attract investors and raises from 500 to 2,000 the number of shareholders a company or community bank can have before it must register with the SEC.

Read full announcement……via Obama Signs Small Business Legislation | Fox News.

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The JOBS Act: An Investor Protection Disaster Waiting to Happen — The Harvard Law School Forum on Corporate Governance

 

Virtually every Title of the JOBS Act would benefit from greater scrutiny, but Title III of the Act, the Entrepreneur Access to Capital Act, poses the most urgent threat to retail, “Main Street” investors.

While intending to promote an Internet-based fundraising technique known as “crowdfunding” as a tool for investment, this title of the JOBS Act would needlessly preempt state securities laws and weaken important investor protections.

The concept of crowdfunding is appealing in many respects because it provides small, innovative enterprises access to capital that might not otherwise be available. Indeed, this is precisely the reason why states are now considering adopting a model rule that would establish a more modest exemption for crowdfunding as it is traditionally understood.

Read full article………via The JOBS Act: An Investor Protection Disaster Waiting to Happen — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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Crowdfunding: Current Legalities & Proposals

There is lots of information you need-to-know in this article about crowd funding and the status of where are the lawmakers  on the topic.  Small business and funding

Excerpt…….Why? To issue securities you either have to register those securities with the SEC (a very expensive process; read Facebook’s S-1 to get a sense of the complexity and expense), or find an “exemption” from registration. For startups, the most common exemption for raising funds in non-public offerings is Rule 506 of Regulation D under the Securities Act of 1933 (Rule 506 offerings account for approximately 95% of all venture and angel financings –see here). Rule 506 prohibits:

using advertising, or general broadcast media, to solicit investments;
taking money from non-accredited investors–unless you provide public offering level disclosure.

Read full article………via Crowdfunding: Current Legalities & Proposals | Proformative.

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The 10 Craziest Kickstarter Projects of 2011

Ideas anyone?   Plus this is a fun read……see what ideas others launched.  Entrepreneurs and startups

Excerpt……Kickstarter’s prominent crowdfunding platform has made it possible for just about anyone to raise money and awareness about his project.

See slides here……via The 10 Craziest Kickstarter Projects of 2011#389571-Portals#389571-Portals#389571-Portals#389571-Portals.  From Mashable

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Coming Soon: More Cash for Start-ups?

Crowdfunding — more on status and filed in news-to-watch.

Excerpt…..Carl Esposti, the founder of Crowdsourcing.org, points out another argument: that the investment risks involved are actually lower, since there will be many investors doing due diligence on the investment. Therefore, he says, if 150 or 200 people decide to vote on an entity, the aggregate of the risk assessment might indicate that that entity is not such a bad bet.

Read full article……..via Coming Soon: More Cash for Start-ups? – Yahoo! Small Business Advisor.

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Why Start-Ups Need ‘Crowd-Funding’

A source of funding for startups is the new and expanding crowdfunding…….this article gives you the current status or information if you are not yet aware of crowdfunding.

Excerpt……Are you familiar with “crowd-funding?” You should be. I have been following the progress of new crowd-funding platforms in recent months, and it is now clear that this new financing mechanism can help strapped early-stage ventures, especially social enterprises. In case you’re hearing about crowd-funding for the first time, let me bring you up to speed.

Read full article……via Why Start-Ups Need ‘Crowd-Funding’ – NYTimes.com.

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Comparison of Crowdfunding Websites

Funding via crowdfunding ….here are 4 comparisons and the industries they most often serve.

Excerpt…..The chart below looks at four services with very different approaches to crowdfunding—and introduces four companies that have found success using them.

Read full article…via Comparison of Crowdfunding Websites | Inc.com.

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Funding: U.S. House Panel Approves Start-up Bills

More good news for startups and entrepreneurs….the bills approved allow improved regulations on crowdfunding AND allow solicitation of specific sources for private offerings….. bothbills  aimed at opening the stream of funding for startups.

Excerpt……A U.S. House panel in a rare burst of bipartisanship on Wednesday backed legislation aimed at making it easier for small businesses to pitch investors for financial backing.

Getty ImagesThe package of four bills includes a measure allowing investments of up to $10,000 through Internet solicitations on social networking and online sites designed for capital raising. The practice, known as “crowd-funding,” has been restricted to donations by the Securities and Exchange Commission, which sets the rules under which investors buy equity stakes in a company. The total investment would be capped at $1 million, or $2 million if companies release annual audited financial statements.

Another bill, introduced by Majority Whip Kevin McCarthy (R., Calif.), would mandate the SEC allow small, private companies to use direct mail or advertisements to solicit private offerings from wealthy investors. The SEC currently has a “general solicitation” ban that effectively limits potential investors to those that have a pre-existing relationship with a startup, which critics see as a barrier to capital formation.

Read full article……..via U.S. House Panel Approves Start-up Bills – In Charge – WSJ.

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